15 Jul 2009

BBC suspends executive bonuses

9:39 pm on 15 July 2009

British public broadcaster the BBC has suspended all executive director bonuses indefinitely, is reviewing their pay, and hopes to reduce the amount it spends on talent as it seeks to cut back in the economic downturn.

The corporation, funded by a tax paid by all television-watching households, says it is making the changes as it, too, is feeling the impact of the downturn, through a drop in property values and in trading at its commercial arm.

To counter the downturn, it has also made progress in its cost savings programme, delivering £237 million of efficiencies in its first year in 2008/09.

The size of bonuses and expenses, from bankers to politicians and directors at the BBC, has become a hot topic in Britain as members of the public struggle during the downturn.

The vast sums paid out to the corporation's most high-profile presenters has also drawn criticism from the country's press.

The BBC, known for its popular news and drama, agreed in 2007 to an annual rise in funding of no more than 3% over the next six years, giving it £3.6 billion less than it had originally asked for.

In comparison, however, the corporation's commercial rivals, such as ITV, have been hammered by the advertising downturn.

A recent report by Communications Minister Stephen Carter to address the country's digital future said it would look to the BBC to help support the rest of the industry.

BBC Worldwide, the commercial arm of the corporation, which exports programmes and magazines around the world, could partner with Channel 4, which is publicly owned but funded by advertising.